Should you’ve been within the blockchain house for a while, you’ve in all probability seen the phrases Layer-1 and Layer-2 used to check with blockchains – however what do these imply? What are the variations?
These phrases describe basic variations to the construction of a blockchain, and greedy them is essential to growing an understanding of blockchain scalability, safety, and effectivity.
Searching for the brief reply? In essence:
- Layer-1 blockchains are huge, main, foundational networks, akin to Bitcoin, Ethereum and Solana. They’re the tree trunk, from which all the pieces else branches from. They’re trusted and safe, however typically additionally cumbersome as they’re designed to be a normal device, reasonably than optimised for a selected process. This implies transaction pace is low, and prices are excessive.
- Layer-2 blockchains are facet networks, constructed on prime of Layer-1 blockchains, akin to Polygon, Immutable, and Base. They’re the branches, sprouting from the tree trunk. They’re typically specialised for a selected area of interest, e.g. blockchain video games, and course of high-volume transactions away from the principle blockchain, permitting apps to run at pace with out clogging the Layer-1 community. This implies transaction speeds are excessive, prices are low – and as safety is garnered from the Layer-1 it’s branching from, safety continues to be robust.
- Layer-3 blockchains are specialist networks, constructed on prime of Layer-2 blockchains. They’re the leaves, sprouting from the branches. These are sometimes reserved for specific high-volume apps, to stop transactions from clogging the Layer-2 community. As they’re constructed particularly for one app, this implies transaction speeds are very excessive, and prices are very low.
Wish to dive deeper and be taught the way it all works? Learn on…
What’s a Layer-1 blockchain?
Layer-1 blockchains are the spine of a decentralized world. They’re liable for processing and finalizing transactions on the pinnacle of safety and integrity.. A number of the most well-known Layer-1 blockchains embody Bitcoin (BTC), Ethereum (ETH), and Solana (SOL).
Bitcoin was the primary Layer-1 blockchain. Designed for peer-to-peer transactions, and utilizing a proof-of-work consensus mechanism, it trades pace and quantity for outright safety – that means that while it’s ultimate for securely dealing with a small quantity of vital transactions, it struggles to scale successfully.
Ethereum expanded on Bitcoin by introducing sensible contracts, enabling the event of decentralized purposes (dApps). Nonetheless, the rise of the primary high-volume blockchain-based sport, CryptoKitties, congested Ethereum to such an extent that almost all of Ethereum’s visitors was devoted solely to supporting the CryptoKitties sport, sending transaction pace via the ground, and transaction costs via the roof.
This spurned the event of a few of the first Ethereum Layer-2 blockchains (akin to Polygon and Immutable), and new Layer-1 blockchains that aimed to resolve the identical downside, akin to Stream.
Many different Layer-1 blockchains have since sprung up, every making an attempt to be a strong spine for additional improvement.
Layer-1’s course of transactions by verifying their authenticity via a community of nodes (particular person units of pc {hardware}), and recording them in blocks. As soon as a block of transactions is verified, it’s added to the blockchain, making the transactions irreversible and safe.
Most Layer-1 blockchains are siloed, that means they can’t talk with different Layer-1 networks, although there’s rising curiosity in constructing bridges – instruments which may enable Layer-1 blockchains to speak amongst one another, permitting belongings to be ship between them.
What’s a Layer-2 blockchain?
Layer-2 blockchains are constructed on prime of Layer-1 blockchains to develop their scalability or develop their performance. They typically concentrate on a selected area of interest, and goal to dump a few of the transactional burden from the Layer-1, permitting for quicker and cheaper transactions for high-volume apps.
Polygon is likely one of the most well-known Layer-2 options for Ethereum. It makes use of an array of sidechains to course of transactions, that are then batched and finalised onto Ethereum – that means that as an alternative of paying for one costly Ethereum transaction, you’re paying for a small fraction of 1 transaction that’s mixed with many others, making speeds a lot larger and costs a lot decrease.
Immutable – a gaming-focused Layer-2 – furthered Layer-2 know-how by introducing zero-knowledge (ZK) rollups, which – briefly – enable large numbers of transactions to be verified and processed with none drawbacks on safety, offering a brand new degree of scalability to blockchains.
Not like Layer-1 blockchains, as they’re branched from their mother or father chain, many Layer-2 networks can talk with each other, permitting all kinds of apps to share knowledge and work with each other.
What’s a Layer-3 blockchain?
Layer-3 blockchains was once stunningly uncommon, however have gotten more and more frequent as apps chase peak optimization.
Layer-3 blockchains are constructed on prime of Layer-2 blockchains, and are sometimes constructed to assist one specific app or sport. This enables that app or sport to learn from even quicker transactions and even decrease prices.
That is sometimes accomplished both in anticipation of an app’s large recognition, or if a Layer-2 app is pushing such a high-volume of transactions that it’s clogging the Layer-2 and affecting different apps on the community.
We’ve written about two Layer-3 blockchains not too long ago: Anomaly, a Ethereum Layer-3 AI gaming platform; and Arbitrum Orbit, an Ethereum Layer-3 that was the previous residence for fashionable web3 MMORPG LumiTerra.
Now that you simply perceive the variations between a Layer-1, Layer-2 and Layer-3 blockchain, will probably be simpler to each perceive and navigate the more and more complicated world of blockchain know-how. Bear in mind: Layer-1s are the trunks, Layer-2s are the branches, and Layer-3s are the leaves!
